Bipartisan Plan Released Today that Would Repeal the SGR, Continue Payment Updates and Introduce New Payment Alternatives

Today, Bipartisan Congressional lawmakers unveiled a bicameral, bipartisan agreement to repeal the Sustainable Growth Rate (SGR) payment formula and replace it with a system that would provide payment updates for five years and introduce new payment alternatives. The deal is the product of three congressional committees, Senate Finance, House Ways and Means, and House Energy and Commerce. If Congress passes legislation to permanently eliminate the SGR, Medicare-participating physicians would avert the 23.7% payment cut scheduled to kick in April 1st.

Called the SGR Repeal and Medicare Provider Payment Modernization Act, the legislation would permanently repeal the SGR and provide an annual update of 0.5% from 2014 through 2018. Starting in 2018, the legislation would also create a new system where payments would be adjusted based on performance in the new Medicare Incentive-Pay System (MIPS), which would consolidate three current incentive programs:

  • Physician Quality Reporting System (PQRS), which provides incentives for physicians to report on the quality of care measures; the
  • Value-Based Payment Modifier, which adjusts payment based on quality use of resources; and
  • Meaningful Use of electronic health records.

Break Away from the Static

The legislation also provides a 5% bonus to providers who receive at least 25% of their Medicare revenue from an alternative payment model that includes a quality-measurement component and risk of financial losses or a patient-centered medical home. Participants in the program would have to receive at least 25% of their Medicare revenue through an alternative payment model in 2018-2019, and the threshold would increase over time.

Still to come are details on how lawmakers would cover the agreement’s cost, which is about $126 billion over 10 years.

As always, ADVOCATE will keep you updated on this and all issues impacting radiology as they become available.

Best regards,
Kirk Reinitz, CPA